Create.Innovate

What are Innovation Audits?

•They are an in-depth analysis of different aspects of an organisation’s current innovation capabilities, procedures and processes, examining key indicators, determining strengths and weaknesses;

•The results of the audit will highlight barriers to innovation, as well as identify improvements or new methods to maximise innovation capabilities.

What are the Benefits of Innovation Audits?

•The audit enhances the company’s innovation capability;

•It identifies opportunities for increasing innovation;

•It clarifies where the organisation needs to focus to maximise innovation success;

•It embeds innovation in the company’s processes;

•The audit can build on individuals’ creativity to be innovative;

•It can identify and control the barriers that stifle creativity and innovation;

•It fosters innovation in the organisation’s culture;

•It can align the organisation in common purpose and action.

The innovation audit framework typically review five main areas:

Organisational Innovation

An Organisational Innovation is the implementation if a new method in business practices, management hierarchy or workplace organisation. Organisational Innovation typically is broken down into Leadership/Strategy, People and Place.

Product Innovation

A Product Innovation is the introduction of a new or improved product. The improvement can be functional, technical, relating to components or materials, or it might relate to user friendliness.

Process Innovation

A Process Innovation is an improvement in production or delivery. This may involve changes in technique or technology to improve efficiency or reduce costs. It may also involve changes to supply chain or distribution.

Marketing Innovation

A Marketing Innovation may involve new markets or a change in packaging, advertising, product design or pricing.

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Following on from the my post recently, about what is your passion and your vision, unless you as a business entity do something different or has a differential approach to that of your competitors, you will be swallowed up in the medium of blandness. Companies need to have a clear vision of why they are different to their competitors, why do you exist (your passion) in business?

In his new book The Innovator’s Manifesto, Michael Raynor, co-author with Clayton Christensen of the bestseller The Innovator’s Solution, argues that disruption theory (which explains how fringe ideas come to redefine entire markets) is not only a useful idea — it stands alone in actually predicting future success.

Christensen describes two different kinds of business innovation:

• Incremental Innovation, in essence building on your existing products, bring this new model to market , incremental, year-to-year improvements. We are all familiar with these, our new motorcar is incrementally better than the previous. This is most apparent in the reams of technological products.

• Disruptive innovation brings to market a product that is simple and more affordable. It takes root in a small niche but eventually reaches mainstream. These may be radical in their operation or completely new to the market, and may meet an unmet demand. Think of Steve Jobs and the ipod, 10,000 songs in your pocket.

Traditionally, innovation management was handled as follows:

1. Variation: Start with lots of ideas.

2. Selection: Try out as many of your ideas as you can, to see what works.

3. Retention: Stick with the successes and abandon the failures.

However, says Raynor, success is more likely if you focus on the disruptive ideas, shape them, and then stick with them. You have first moved advantage, but you may not rest on this, as many of first movers have been swallowed up and left by those that follow, observe and do better.

1. Focus: Go where the money isn’t. Focus efforts on those markets and technologies that target un-served or over-served segments.

2. Shape: Seek ‘creative creation’. By serving profitable segments that incumbents see as inconsequential, new businesses can create a valuable foothold. Then, by building businesses around ‘enabling technologies’ –elements that allow performance to improve over time – entrants can move from that foothold to mainstream dominance.

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Innovation is hardly a new term. The word, which derives from the Latin noun innovatus, meaning renewal or change, appeared in print as early as the 15th century, according to Robert Leonard, chairman of Hofstra University’s linguistics program

FIVE MYTHS OF INNOVATION

Innovation is about creating a hot new product… New products are swiftly copied and rarely enjoy sustained profits.

Innovation comes from being creative… It is far likelier to come from being disciplined.

Innovation is expensive, demanding lots of resources… Failure to innovate is what is costly.

Create hundreds of ideas because of high failure rates… Fewer, bolder ideas based on your company’s capabilities and unmet customer needs you discover work best.

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My thoughts today for this blog, is of the resistance to change, fear of collaborating together in case we lose out by an enterprise.

I experienced first hand recently that fear of collaborating with others for the greater good, an increased slice of business, footfall and helping out with a collective town spirit. I help out with a farmers market, the basic rung on the ladder for many artisan craft and food startup’s or those that wish to just earn a few bob from their passion. Traders use it to do basic market research and market awareness; do you like my product, are you a repeat customers, what suggestions do you have? and more besides, in essence, let the market decide, economics 101.

I believe that with collaboration, the sum of the parts is lesser than that of the whole, 1+1=2 1/2 or greater.

I was informed by others in the committee that the market was causing problems by its location and occurence on the main shopping day, that we would have to move to another location and or shut down. We looked at other locations, a street offers only so many opportunities for a street market, and with Health & Safety in my mind, none were suitable that didn’t cause us further objections or increased our risk profile. Our only recourse was to reduce our stands, profile, display.

Subsequently it has emerged that as we were the shaded side of the street, the farmers market brought forth shoppers to ‘our side’, and that other shops had benefited from increased footfall, takings and were happy for us, we brought variety, passing trade and the street looked busy and alive.

Bring this back to an area that we work in – co-opetition ‘collaborating with your competition for the greater good’.

Think about Alessi (Italy) and the Lombardy Region in Italy which it is based, there are many design craft organisation’s in this area, who in olden days would see each other as competition for resources, customers and the bottom line. Today they collaborate together, form cooperatives, share experiences and generate greater wealth, knowledge, market share combined than could do individually.

Could you consider this

with your network of contacts ? probably so

with those who you compete with? that is your challenge today

Spend some time thinking about it, is it worth a doodle, a telephone call, a coffee, a chat ?

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Discussions about innovation are often made difficult because people are unclear about the exact meanings of some key terms. In particular there is confusion about the difference between creativity, innovation and invention. Let us start with some definitions:

Invention is the creation of something that has never been made before and is recognised as the product of some unique insight.

Innovation is the implementation of something new.

Creativity is the capability or act of conceiving something original or unusual

If you have participated in a brainstorming meeting and dream up dozens of new ideas then you have displayed creativity but with out follow up in terms on delivery then there is no innovation until something gets implemented. Somebody has to take a risk and deliver something for a creative idea to be turned into an innovation. An invention might be a product or device or method that has never existed before. So every invention is an innovation. But every innovation is not an invention. When your company first published its website that was a major innovation for the company even though many other websites already existed, or AppIe Ipad -> Ipad2.

Most tend to think of an innovation in terms of a a new product but this can also be with a new process, method, business model, partnership, route to market or marketing method, Innovation covers a wide latitude of areas to consider. Indeed every aspect of your business operation is a candidate for innovation. Peter Drucker said, ‘Every organisation must prepare for the abandonment of everything it does.’ So do not restrict your vision of innovation to products. Some of the most powerful innovations you can make are in business methods and customer services. If we look at companies like Dell, eBay and Amazon we see that their great innovations were with their business models rather than in new products. We ourselves help organisations to understand their business model and to think differently about these.

Inovations can be incremental or radical. Every improvement that you make in products or services is an incremental innovation, a step by step layer approach building on the success (or failures) of the previous. Most businesses and most managers are good at incremental innovation. They see problems in the current set-up and they fix them. Radical innovations involve finding an entirely new way to do things. As such they are often risky and difficult to implement. Most larger organisation’s are poor at radical innovation, they are risk adverse, they prepare to deal with the current status quo and what is currently their cash cow revenue generating product or service. If you had been making records then you could have introduced incremental innovations in your design and marketing. However if this was your strategy then a radical innovation, CD’s, would eventually kill you. The CD manufacturer could similarly introduce various incremental improvements. Once again a radical innovation, music downloads over the internet, would make your offering obsolete, as we see with various retail chains like HMV & Jessops (Camera & Photography). Both have recently ceased trading and or are in court protection / administration. So we need to constantly look for incremental innovations and radical innovations. We need to develop creativity and turn it quickly into innovation.

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I believe that innovation is for all business. So here is the first in a number of occasional articles that relate innovation to small business and show that creative thinking is really just common sense. As an example here we have used a restaurant but the principles apply to all small business.

Do restaurants need to innovate? They do if they want to compete.

Think about innovation in the culinary world ? Did you think of Heston Blumenthal or Ferran Adria?

Sadly a lot of people do, and assume that innovation is not for them because they associate it with high-concept foods, which is all very well but it wouldn’t go down well with the Saturday evening crowd in the midlands.

But, innovation is so much more than culinary experimentation. Innovation is changing your product or process in order that you improve your bottom line. In fact, you’re probably doing it now; you just don’t call it that. As we know, the only way that small businesses will survive is to listen to your customers and constantly adapt to your environment – the survival of the fittest!

There are many types of business innovation and they can be applied as easily to small businesses as they can to a giant pharma company.

Here is the first in a series of tips for innovation for small business:

Ask your customers. It seems obvious, but find out what you need to improve. Good feedback is good for morale but constructive criticism is good for growth. Don’t take it personally, for every customer that gives feedback, how many are thinking the same thing but will not say anything? Customer feedback is a great for generating ideas for business. Your customer usually has something that’s bothering them. If you can fix their pain you will gain their loyalty.

So, how do you get feedback without spending a fortune on market surveys?

Here are a few ideas!

I. Ask after every purchase if there was anything that could be improved

II. If there was no purchase, ask for feedback

III. Ask frontline staff about their perception of customer satisfaction

IV. Offer prizes for completed survey forms

V. If you have a facebook page ask for suggestions, or if you have an email database create an online survey (e.g. surveymonkey)

VI. Put yourself in the place of your customer by creating an empathy map or even walking through the sales process.

If you are creating a survey, make sure that you know what feedback you are looking for. This will ensure that you ask the right questions. Make sure that the questions and answers are formatted properly (e.g. make sure there is enough space for open comments).

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Once you have finished the interpretation and meaning stages of new product development you can then define a new vision for your product or product family. Truly human-centred innovators do not create marketing strategies in the traditional sense. Rather, the make proposals to their customers that define a vision for their product or services. This vision will help to facilitate understanding. Advertising at this point is not ideal as advertising is more effective with straightforward messages. Design innovators use their interpreters who can explain the new meaning and champion the product in the wider market. Often Alessi will publish catalogues of prototypes to start a discourse long before a product arrives on the shelves. New food products can be introduced through fairs, farmers markets, social media and through food related print media. Once the product is championed by a trusted ambassador the public is more likely to follow. The champion may also be the person to make sense of the product, especially if it is disruptive to the market. The slow food movement is a prime example of a message being spread through interpreters. Small convivia of slow food champions have formed in many countries. Each group concentrates on improving the slow food experience in their local area, and even though they do not advertise the movement has gained a huge amount of respect for its work. There are a number of pop-up restaurants that operate in the same way. Rather than carrying out expensive marketing campaigns, Joe Macken (Jo Burger, Crackbird) has built up a strong customer base through print and social media, but at the back of this promotion there is a quality product at a reasonable price.